This month’s financial market commentary has been kept purposefully brief. We’ve provided a separate article entitled Is the Sky Falling in Bond-land? that goes into more depth about developments in the bond market. (You will see that article in our next blog post.)
Resilient corporate earnings were the main development that supported the stock market in August.
Earnings reports for the second quarter ended June 30 in aggregate turned out to be much better than anticipated and far better than last year.
For example, Nvidia, the maker of chips used in AI data centers (and currently the largest company in the US when measured by stock market value) announced stellar results in late August.
But what really caught the attention of investors was Nvidia’s forecast that strong sales growth would continue well into next year.
With most large, publicly traded companies having released their results for second quarter, 76% exceeded analysts’ expectations.
Sales in the second quarter of 2026 were up 15% compared to the same period last year, and earnings were up by 32%.
The month of August was generally positive for both stocks and bonds, reversing the weak performance experienced by most market segments in July.
US Technology stocks led the way with a 5.6% increase. Large company US stocks did well, rising by 2.7%, and foreign company stocks weren’t far behind, with an increase of 1.8%. Small company US stocks struggled to keep pace but still generated positive performance of 0.9%.
Gains in the US bond market were more muted, but still generally positive, with high-quality bonds returning 0.4%, and US Treasury bills up 0.3%. Foreign bonds were the laggard, declining by a modest 0.1%.
Here are results for August and 2026 Year-to-Date, compared to longer-term annualized returns (10-Year Trailing):
Source: Morningstar
-RK